Barry Lowenthal, president of The Media Kitchen, joined Digiday+ members for a Slack town hall on March 15 to talk about the challenges facing the agency business. The full conversation is available exclusively to Digiday+ members, but lightly edited excerpts appear below. Click here to join Digiday+.

Here are Lowenthal’s views on:

Media agencies’ biggest challenge“Making profitable revenue. It’s just getting harder and harder to make money in this biz. Did everyone see the recent article about the hedge funds shorting holding company stocks? Wall Street is betting against us.”

Agencies’ biggest mistakes“I think competition is compressing fees. But I don’t think agencies have ever connected their contribution to overall market value. In the age of exposure, it was less important because no one was able to connect advertising to sales until it happened. But now, we’re in the age of outcomes, and agencies still can’t connect their contribution to performance.”

Facebook and Google“I think we should short Facebook. I think they are going to have lots of trouble in the near future. Most people feel worse about themselves after spending time on Facebook, so how is that a good business? … I don’t think clients think they’re in a hostage situation yet. Facebook and Google still work and haven’t raised prices while our addiction increases. Once that starts happening, clients will start to get really worried, but I think that’s still a ways away.”

Clients in-housing media buying“We’ve had clients take some functions — mainly social buying — in-house, only to give it back to us and decide they want to just keep social listening. … Maybe clients will just pay for strategy and ideas, and take execution in house. I spoke to a client this morning that wanted to hire us to help them develop a strategy to get funding from senior management. It happens more and more, and we’re adjusting our business model to support that kind of work.”

Digital publishing“I just saw a publishing group that had $100 million in backing, and I was looking at their content, distributed via social, and I couldn’t help wonder, why would anyone care? There is just so much content, the white noise is deafening. I think it’s hard to launch a media brand in today’s marketplace when they’re all fighting over 15 cents.”

comScore“All I will say about that is you may want to short comScore.”